A landlord may issue a Two-Month Notice to End Tenancy if the landlord is selling the rental unit and the purchaser or a close family member of the purchaser intends, in good faith, to occupy the rental unit.
The term “close family member” includes the purchaser’s parents, spouse and children as well as the purchaser’s spouse’s parents and children. Notably, neither the purchaser’s siblings nor cousins fall within the definition of this term. However, if the purchaser is a family corporation, the principle shareholder’s brother, sister or close family member who holds voting shares would be eligible to take over occupancy of the rental unit as would the principle shareholder.
Before issuing such notice, the following three conditions have to be met:
- The landlord has accepted, in good faith, an offer to purchase the rental unit;
- All the conditions of the agreement have been fulfilled or otherwise removed; and
- The purchaser has asked the landlord, in writing, to issue a Notice to End the Tenancy on the grounds that the purchaser or their close family member intends, in good faith, to occupy the rental unit.
Where the tenancy is on a month-to-month basis, the landlord’s notice is effective not earlier than two months after the date the tenant receives the notice and its effective date must be on the day before the day of the month that rent is normally due. For example, if a tenant’s rent is due on the first day of each month and the purchaser intends to have the tenant evicted by July, the landlord may seek to terminate the tenancy on June 30th and, if so, will have to provide the tenant with their notice by April 30th. Depending on the closing date of the sale, the landlord’s notice may not be effective until after title for the property has already been transferred.
Where the tenancy is for a fixed-term, in addition to the rules described above, the effective date of the notice may not be earlier than the date specified as the end of the fixed-term.
These grounds for eviction require both the landlord and the purchaser to be acting in good faith. Practically speaking, this means that the landlord and the purchaser must be acting with an honest intention and with no ulterior motive to defraud the tenant or to seek an unconscionable advantage.
In addition to the two months’ notice, a landlord seeking to end a tenancy to regain possession of the rental unit on behalf of the purchaser must provide the tenant, before the effective date of the notice, with monetary compensation equivalent to one month’s rent payable under the tenancy agreement. However, instead of having the landlord issue a separate payment for such compensation, the tenant may elect to simply withhold payment of rent for the final month of the tenancy.
Once served with a Two-Month Notice to End Tenancy, the tenant may challenge it by applying for dispute resolution within 15 days after receiving the notice. If the tenant fails to take any action within 15 days, the tenant is presumed to have accepted that the tenancy ends on the effective day of the landlord’s notice and must vacate the rental unit by that date.
Faced with such notice, the tenant may also choose to end a periodic tenancy (ex. a month-to-month tenancy) even earlier than the two-month notice period by giving the landlord at least 10 days’ written notice on any date that is earlier than the effective date of the landlord’s notice. Once this notice is issued, the tenant is only obligated to pay rent owing up to the effective date of the notice and any overpayment of rent must be refunded by the landlord. Notably, the tenant’s 10-day notice does not affect in any way the tenant’s right to monetary compensation by the landlord.
In the earlier example where a landlord chooses to end the tenancy on June 30th by giving notice to their tenant on April 30th, a tenant may instead chose to move out on June 15th by giving the landlord a 10-day notice. If the tenant already paid rent for the entire month of June, the landlord will have to refund the rent paid for the second half of that month and will still owe the tenant monetary compensation in the amount of one month’s rent.
Finally, if the purchaser fails to take steps to accomplish the stated purpose for ending the tenancy (ie. to personally occupy or have a close family member occupy the rental unit) within a reasonable period after the effective date of the landlord’s two-month notice or if the rental unit is not used for that stated purpose for at least 6 months beginning within a reasonable period after the effective date of the notice, the purchaser must pay the tenant a penalty equivalent to twelve-times the monthly rent payable under the tenancy agreement.
However, if the Residential Tenancy Branch determines that “extenuating circumstances” prevented the purchaser from fulfilling their obligation under the Act to occupy the rental unit within a reasonable period of time after the effective date of the notice and/or for a minimum period of 6 months, the purchaser may be excused from this requirement.
Last revised: April 27, 2019
- Your property may be more marketable or desirable to a larger pool of potential buyers if title is sold free and clear of all encumbrances such as a tenancy agreement. However, landlords will often make the mistake of thinking that they can send their tenant a notice of eviction as soon as they put their rental unit up for sale. This is not the case since all of the three conditions outlined above have to be fulfilled before you issue a notice of eviction in such circumstances.
- Landlords will often resort to issuing a two-month notice to end tenancy after having failed to evict the tenant for cause. Don’t make the mistake of believing that this is necessarily an easier method by which to evict your tenant. Given the good faith requirement, both your intentions and those of the purchaser may be called into question at any time and particularly in circumstances where you have been previously unsuccessful at evicting your tenant on different grounds. Previous failed eviction attempts may be taken as evidence that you’re not acting in good faith but rather, simply looking for any excuse to get rid of your tenant.
- Also, while proving that the purchaser has not used the rental unit for the stated purpose for at least 6 months may present some challenges for the tenant as far as obtaining evidence is concerned, do not underestimate the lengths to which some former tenants, who feel that they have been wronged, may go to prove that they have been evicted under false pretenses.